The interest rate paid on the loan is 3.48330378%
p.a.
We can use the '=rate' function in excel to solve for the interest rate.
We need to put in the following parameters :
nper (no. of periods) = 360 (30 × 12 since EMI is given)
pmt = $950 (pmt refers to constant payments made at regular intervals)
pv = $212,000 (refers to the loan amount)
We need to enter 'pv' as a negative number since excel treats it as an outflow.
So, the formula in excel will look like this
=RATE(30*12,950,-212000)
This gives us an interest rate of around 0.290% per month.
We simply multiply by 12 to arrive at the nominal annual interest rate.